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Major indexes in Asia close higher as Kiwi dollar falls to multi-month lows

Key Points
  • Asian markets climbed after U.S. budget measure passed
  • The New Zealand dollar fell to its lowest levels in five months
  • Japan's snap election on Oct. 22 is in focus
  • China's central bank governor on Thursday warned that too much optimism in markets could lead to a collapse of asset prices

Asia markets closed higher on Friday after shaking off negative sentiment seen earlier in the day. Wall Street had wobbled and European stocks had taken a stumble overnight.

Japan's Nikkei 225 held onto slight gains to close up 0.04 percent, or 9.12 points, at 21,457.64. The benchmark index has now closed higher for 14 straight sessions.

Investors appeared unconcerned over potential uncertainty in the lead up to Japan's elections on Oct. 22. Japanese Prime Minister Shinzo Abe's coalition is likely to win a two-thirds majority, a poll from local outlet Kyodo News showed earlier this week.

"Sunday's election will not usher in a new era in Japanese politics," said Miha Hribernik, senior analyst at Verisk Maplecroft, in a note.

Across the Korean Strait, the Kospi edged up 0.67 percent to close at 2,489.54. Most blue-chip tech stocks pared losses made on Thursday: Samsung Electronics closed up 1.62 percent and SK Hynix gained 2.78 percent. Those gains offset moderate losses seen in manufacturing names.

Down Under, the S&P/ASX 200 climbed higher by 0.18 percent to close at 5,907, with the utilities sub-index rising 1.72 percent to lead gains on the broader index.

The climbed 1.06 percent by 3:01 p.m. HK/SIN, recouping some losses after closing nearly 2 percent down on Thursday. Experts attributed Thursday's fall to a range of factors including tighter liquidity and comments from the governor of China's central bank.

People's Bank of China Governor Zhou Xiaochuan had warned Thursday that too much optimism in markets could lead to a collapse of asset prices, Reuters reported.

Mainland markets gained after closing moderately lower in the previous session: The was added 0.28 percent to close at 3,379.4990 and the Shenzhen Composite rose 0.805 percent to end at 1,999.6776.

India markets were closed for a public holiday.

Asia-Pacific Market Indexes Chart

The Senate passed a budget proposal that allowed Republicans to move closer to eventually passing tax reform. The measure was passed with a vote of 51-49.

The U.S. currency rose against the Japanese yen following those headlines to fetch 113.20 — above levels around the 112 handle seen most of this week. The dollar index, which tracks the greenback against a basket of six currencies, edged up to 93.472 at 2:46 p.m. HK/SIN.

Yields on the 10-year U.S. Treasury note inched higher to 2.3574 percent after falling to 2.3178 percent on Thursday.

"Global markets have flipped from a state of agony to one of ecstasy as the path has been cleared for the long-awaited U.S. tax reform to move forward," Stephen Innes, APAC head of trading OANDA, said in a note.

Investors stateside also digested a Politico report that President Donald Trump favored Federal Reserve Governor Jerome Powell out of a pool of candidates being considered to succeed Fed Chair Janet Yellen. Powell is seen as less hawkish than Stanford University economist John Taylor, another candidate who had been regarded by market watchers as a front-runner.

Trump is expected to make his decision early in November before he departs on a trip to Asia.

U.S. markets, which initially recorded declines earlier in the session, finished Thursday near the flat line following the news. Still, the Dow Jones industrial average closed up 0.02 percent, or 5.44 points, at a record 23,163.04.

Elsewhere, European stocks closed lower on Thursday after Spain's government said it would suspend the autonomy of Catalonia after its leader did not give clarity on the region's independence. The STOXX 600 declined some 0.6 percent and Spain's IBEX lost 0.74 percent.

In individual stocks, Apple suppliers in Taiwan closed mixed after shares of the American tech giant slid in U.S. trade on reports of poor iPhone 8 sales: Largan Precision tumbled 2.96 percent, Hon Hai Precision Industry was down 0.88 percent, but Pegatron rose 2.03 percent.

Over in Japan, shares of Nissan closed down 1.55 percent after the automaker said Thursday it was suspending production in Japan for a period. The suspension will take place for a minimum of two weeks as the automaker looks into issues with its inspection systems, Reuters reported.

Shares of Kobe Steel finished the session 1.59 percent lower following headlines that it had continued to make up data even after investigations brought falsification issues to light. The company will hold a news conference later in the day, Nikkei said.

The extended losses after tumbling in the last session on news that the Labour Party would form a coalition government with the nationalist party, New Zealand First. The Kiwi dollar traded at $0.6992, below levels around the $0.71 handle seen for most of the week.

On the energy front, oil prices were firmer after settling more than 1 percent lower in the last session on profit-taking. Brent crude tacked on 0.4 percent to trade at $57.46 a barrel and U.S. West Texas Intermediate added 0.51 percent to trade at $51.55.

— CNBC's Patti Domm and Liz Moyer contributed to this report.